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*Official* CBA Negotiations and Lockout Thread

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For anyone interested, there's a new article up about Fehr's speech to the CAW. Here's a selected quote:

“All I can tell you is there had been some movement,” Fehr said in a media scrum after his speech. “We responded with some movement, we think we’re done on the dollars or close to it. … It seemed to me that we ought to be able to move forward and finish things off (but) they have not indicated a willingness to move forward.”

Campoli said he feels the players are doing their part in the negotiations, but that it’s difficult when what they offer “gets thrown back in your face.”

“It’s not hard to see who’s been taking the steps in the right direction,” Campoli added. “After being there and going to meetings, we made a step in their direction to make it close. … to have it come to a halt is just disappointing.”

When talking about what happens from this point on in negotiations, Fehr said, ”you keep negotiating and see what happens. … The players have never made threats or threatened to walk out.

“My job is to lead (the players) … their job is to make decisions on an informed basis.”

Fehr explained that with all the backlash both sides have received during the lockout, he is concerned about the fans.

“You always have to be worried about the fans. If you’re not you have to be more perceptive,” Fehr said. “The response we’ve had from fans has been very gratifying and supportive.”

During his speech and the scrum, Fehr would not comment on any specific details concerning CBA proposals.

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That comment about negotiation being loud and messy when done well is absolutely not true and clearly written by someone who has no idea how it is done.

I do have a very good idea about it, having been at the table during several CBA negotiations (on the management side) for unions numbering in the tens of thousands of members.

This style of position based bargaining where one side makes outrageous demands and then plays all bombastic and annoyed hasn't been used in real professional bargaining in decades... only when you really don't want a deal.

What is now much more common is interest based bargaining. You find out what the base interests of either side are without stating your position or any numbers. You get to a base "interest" by asking "why" several times to get to the root rather than the position.

eg.

"We want to pay the players less money"

"Why"

"The league isn't making enough money"

"Why"

"There are franchises in financial trouble who are unable to cover their operating costs"

"Why"

"They aren't getting attendance or local TV deals"

etc....

You have suddenly uncovered the real issues at the heart of things which allows for a more creative solution.

eg:

- relocate a couple of crappy franchises

- figure out a way to improve their revenue (like having the players being required to do more community outreach; league funding a grassroots kids hockey program like Nashville did with smashing success; sharing all TV revenue equally amongst all teams including local deals; etc)

- Revenue sharing

- contraction

From listening to the language, the league is using old school position based bargaining and Fehr who is an actual professional negotiator is using position based bargaining. He keeps saying "we are trying to figure out what the real issues are"...

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"I don't think highly of the management people(the owners) in hockey. Miserable human beings, I think that these are people who don't know the meaning of competition. They don't know how to compete with each other" - Marvin Miller R.I.P

http://www.youtube.com/watch?v=lgUaHDwLhwQ

Great video from when Fehr got hired. CBC actually produced something that's watchable.

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As I understand it, the argument is that a salary cap coupled with a short contract term limit (especially with the NHL's 5% variance rule) would leave teams less money to spend on the majority of their team.

Stars get paid what they get paid not only their skill but also their revenue generation power. As such, teams will still want to attract stars to play for their team, but doing so on a shorter contract, especially with a strict variance limit, will mean their cap hit is significantly higher than it is now.

For example, look at the 12-year contract extension Crosby just signed back in June. It breaks down by year like this:

  • 2013-14 — $12 million

  • 2014-15 — $12 million

  • 2015-16 — $12 million

  • 2016-17 — $10.9 million

  • 2017-18 — $10.9 million

  • 2018-19 — $10 million

  • 2019-20 — $9 million

  • 2020-21 — $9.6 million

  • 2021-22 — $9 million

  • 2022-23 — $3 million

  • 2023-24 — $3 million

  • 2024-25 — $3 million

  • Cap Hit: $8.7M

(Source: http://www.cbc.ca/sp...t-penguins.html)

As you can see hockey's poster boy is getting PAID. Even with a new CBA, players like him will continue to be catnip to owners and owners will continue to do whatever they need to to get them, meaning similar deals (subject, of course, to the same 20% of upper cap limit assuming that rule remains in the new CBA).

So, since his value compared to now would not have dropped just because of the new CBA, it's fair to assume he could be paid as similarly to now as the rules allow. Given that, if Crosby's deal (remember, it's not even 6-months old and has yet to even come into effect!) were forced to be 5-years with a 5% variance it might have looked something like this:

  • 2013-14 — $11 million

  • 2014-15 — $11 million

  • 2015-16 — $11 million

  • 2016-17 — $10.45 million

  • 2017-18 — $10.45 million

  • Cap Hit: $10.78M

Even with his salary being reduced by a million in the first 3 years and the amount allowed by the 5% variance rule for the remaining 2, his cap hit would still be $2M above what it is now, meaning $2M less for Pittsburgh to spend on the rest of their players. And remember, Crosby isn't the only star on their team so that ripple effect would be increased with each high paid star and would be applied against a lowered cap under the new 50/50 split.

EDIT TO ADD: For some unknown reason the NHL wants a 5-year term limit only when a player is signing with a new team. When re-signing with the same team for some reason they're fine with a 7-year term limit. Given that the example I used was a player who was re-signing with the same team, it's more fair to look at a 7-year contract. So, assuming the same $1M drop in the first 3 years, a 7-year deal for him might look something like this:

  • 2013-14 — $11 million

  • 2014-15 — $11 million

  • 2015-16 — $11 million

  • 2016-17 — $10.45 million

  • 2017-18 — $10.45 million

  • 2018-19 — $9.5 million

  • 2019-20 — $9 million

  • Cap Hit: $10.34M

As you can see, even with the extra 2 years, thanks to the 5% variance limit his cap hit is only lowered by $0.44M compared to the 5-year deal and is still $1.64M higher than would be as the contract was signed.

To make room in the cap to pay the stars, teams would need to fill out their rosters with cheap players. There would no longer be what is being referred to as the "middle class" of players. You would either be paid like a superstar or a 4th line plug and any players who didn't fit neatly into those slots would be forced out, or forced to play for far less than they are worth. Given the option to play in other leagues for better pay, or even leave behind the risks of hockey to pursue other careers, many will simply be forced out of the league.

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Because players that sign ridiculous contracts right now are guaranteed to have like 8-10 year careers if they stay healthy. Even though alot of those players are not very valuable to their teams by the end of them.

If somebody like Scott Gomez had signed a 5 year deal, he might not even be playing in the NHL anymore.

Teams won't be giving long contracts to players that takes them past the age of 35, because there would be no more incentive to lower their cap hit. Therefore careers will end much earlier for alot of players.

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Two things I noticed in this post. One was that I understand owners want to build the best team possible but the salary cap is there to foster parity and competitiveness for all in the league consistently. It's unfortunate if you can't fit all the stars you want on the team but that's the rules.

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As I understand it, the argument is that a salary cap coupled with a short contract term limit (especially with the NHL's 5% variance rule) would leave teams less money to spend on the majority of their team.

Stars get paid what they get paid not only their skill but also their revenue generation power. As such, teams will still want to attract stars to play for their team, but doing so on a shorter contract, especially with a strict variance limit, will mean their cap hit is significantly higher than it is now.

For example, look at the 12-year contract extension Crosby just signed back in June. It breaks down by year like this:

  • 2013-14 — $12 million

  • 2014-15 — $12 million

  • 2015-16 — $12 million

  • 2016-17 — $10.9 million

  • 2017-18 — $10.9 million

  • 2018-19 — $10 million

  • 2019-20 — $9 million

  • 2020-21 — $9.6 million

  • 2021-22 — $9 million

  • 2022-23 — $3 million

  • 2023-24 — $3 million

  • 2024-25 — $3 million

  • Cap Hit: $8.7M

(Source: http://www.cbc.ca/sp...t-penguins.html)

As you can see hockey's poster boy is getting PAID. Even with a new CBA, players like him will continue to be catnip to owners and owners will continue to do whatever they need to to get them, meaning similar deals (subject, of course, to the same 20% of upper cap limit assuming that rule remains in the new CBA).

So, since his value compared to now would not have dropped just because of the new CBA, it's fair to assume he could be paid as similarly to now as the rules allow. Given that, if Crosby's deal (remember, it's not even 6-months old and has yet to even come into effect!) were forced to be 5-years with a 5% variance it might have looked something like this:

  • 2013-14 — $11 million

  • 2014-15 — $11 million

  • 2015-16 — $11 million

  • 2016-17 — $10.45 million

  • 2017-18 — $10.45 million

  • Cap Hit: $10.78M

Even with his salary being reduced by a million in the first 3 years and the amount allowed by the 5% variance rule for the remaining 2, his cap hit would still be $2M above what it is now, meaning $2M less for Pittsburgh to spend on the rest of their players. And remember, Crosby isn't the only star on their team so that ripple effect would be increased with each high paid star and would be applied against a lowered cap under the new 50/50 split.

EDIT TO ADD: For some unknown reason the NHL wants a 5-year term limit only when a player is signing with a new team. When re-signing with the same team for some reason they're fine with a 7-year term limit. Given that the example I used was a player who was re-signing with the same team, it's more fair to look at a 7-year contract. So, assuming the same $1M drop in the first 3 years, a 7-year deal for him might look something like this:

  • 2013-14 — $11 million

  • 2014-15 — $11 million

  • 2015-16 — $11 million

  • 2016-17 — $10.45 million

  • 2017-18 — $10.45 million

  • 2018-19 — $9.5 million

  • 2019-20 — $9 million

  • Cap Hit: $10.34M

As you can see, even with the extra 2 years, thanks to the 5% variance limit his cap hit is only lowered by $0.44M compared to the 5-year deal and is still $1.64M higher than would be as the contract was signed.

To make room in the cap to pay the stars, teams would need to fill out their rosters with cheap players. There would no longer be what is being referred to as the "middle class" of players. You would either be paid like a superstar or a 4th line plug and any players who didn't fit neatly into those slots would be forced out, or forced to play for far less than they are worth. Given the option to play in other leagues for better pay, or even leave behind the risks of hockey to pursue other careers, many will simply be forced out of the league.

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Maybe I am misunderstanding the NHL proposal, but isn't the 5% variance based on every year of the deal? Meaning ANY year of the deal cannot vary more than 5% of the highest yearly salary?

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NHL, players were ‘very close’ to deal before talks broke down: Donald Fehr

Donald Fehr maintains a deal was close with the NHL to end the four-month lockout and kick-start the hockey season before talks broke off.

The NHL Players’ Association executive director stuck by his previous remarks that an agreement appeared to be within reach Thursday night when the league told the union it was rejecting the players’ proposal and pulling its own offer.

“My comments from a couple of days ago stand on their own. I think we were very close,” Fehr told reporters Saturday after addressing a Canadian Auto Workers council meeting.

Fehr’s comments run contrary to NHL commissioner Gary Bettman, who said angrily Thursday he didn’t think the owners and players were close to a deal.

Fehr said he has not spoken directly with Bettman or deputy commissioner Bill Daly since talks crumbled, adding there have been some minor chatter between the two sides but that no future meetings have been scheduled.

“So far they have not indicated a willingness to continue discussions,” Fehr said.

He also declined to comment directly on previous remarks by Bettman questioning Fehr’s motives for saying a deal was close, saying only he was disappointed with how things turned out.

“I’m always disappointed when you’re involved in a process and people want to call a halt to it,” Fehr said. “The one thing we know for certain is that you can’t make agreements if you’re not talking about it.”

The two sides will have to renew negotiations soon if the remainder of the NHL season is to be saved. The lockout has resulted in the cancellation of 422 regular-season games through Dec. 14. Bettman indicated the league would not consider a schedule of fewer than 48 games — the same length it had after the 1994-95 lockout — which leaves roughly a month to reach an agreement.

But Fehr said negotiations are further ahead than they were a week ago, despite talks collapsing, and that a tentative agreement over a pension plan as well as discussions on money issues are largely done, with the exception of transition payments.

“We think we’re either done on the dollars or very close to it,” he said.

Hopes had been high Tuesday when four new owners joined the negotiation process and met well into the night with players, leading some close to the situation to believe that an agreement was at hand.

But tempers flared during another marathon session Wednesday that saw the sides exchange offers and move closer together.A comprehensive proposal was handed over to the league by Fehr on Thursday, but the league rejected the offer and rescinded its own tentative agreement.

Fehr told a room packed with CAW members that the players’ association and other labour groups share many traits when it comes to negotiating.

He told the meeting that league negotiators must take into account concessions made by the players in their last collective agreement, as well NHL revenue increases in recent years.

Fehr said he wanted to be the bearer of good news in his talk to the assembled union members.

“I had hoped when this invitation came, and even earlier this week, to be in a position to tell you that we had successfully concluded an agreement and the lockout was over,” he said.

“I can’t tell you when it’s going to end. I can tell you that the only way it’s going to end is to keep at the process and hope that eventually we’re able to find a way through the thicket of issues that are there.”

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It's not simply a matter of teams not being able to get all of the stars they want. It's that any player who isn't a star will have their earning potential even more significantly limited throughout their career. Stars will still get what stars get because while teams are not built by a few players alone, decent merchandise sales may be.

Some have suggested the new cap could be as low as $58M but by year 2 around $60M. Since the NHL has said they might allow teams to spend to last season's cap for the first season, let's just look at the $60M. According to Cap Geek, 16 teams are currently over that amount. That means half the league will be looking to dump players and needing to replace those players with cheaper ones. Where do those higher salaried players go? Remember, the whole point of lowering the salary cap is to help teams losing money spend less, not more! That means fewer spots will be available for those middle earning players since higher spending teams can't afford them and lower spending teams don't want them. To replace them, the better teams will be scooping up the best of the lower salaried players, leaving the poorer teams (that are often less attractive to players for any number of reasons) with less quality and less choice.

The Canucks, who are actually pretty close to what the NHL seems to envision since most of our stars having signed reasonable length contracts with little variance - see Henrik, Daniel and Kesler for examples, will have to drop almost $8M of cap, meaning realistically we'll probably have to drop around $11M of current salary to create enough space under the new cap to fit in the players we need to replace the ones we dump. Remember, Luo only counts for $5.3M of cap space and we'd still be millions above the cap without even being able to afford a backup goalie. How do we trade players with middle or high end contracts if no one can afford them?

That's possibly what they were thinking, but without any guarantee that it's based on reality. For one example, look no further than Cody Hodgson. The Canucks certainly invested more into his development, but Buffalo would still be able to re-sign him for a 7-year deal under the new rules.

And that brings me to the obvious get around teams will use: If you want to sign a new player to 7-years just deal to get him traded shortly before his old contract runs out. So, he may never play a single game for you before you "re-sign" him, but as long as you got his contract before it ran out he'll be eligible for a 7-year contract. (That is, of course, assuming they don't add some rule to say a player has to be with a team for a set amount of time before being eligible for a 7-year deal.) But, if you weren't able to get the other team to deal the player to you, you can only sign him for 5-years. Tell me how that makes sense.

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I guess they have to come to an agreement on whether they want to play hockey or if they want to make money, and whose money it should be. You're hitting the nail on the head. Some owners want to to able to dominate the market, especially the wealthy ones.

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Found this video relating to the lockout on the Macleans website, didn't know where else to post it.

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As much as I am totally in the player's corner this time out, I do think there are a couple of concessions that they should be prepared to make.

Not every athlete gets guaranteed contracts like the NHL. With those contracts the owners take on a lot of risk. What the owners really should be going for are concessions that make it so they don't have to pay for players who don't perform.

I see two huge ways to aid this:

1. Limits on contract length. You don't know what a player will be like 5 years on, never mind 13 years. The 5 year limit with 7 years for your own player seems entirely reasonable.

2. Leave the ELC and RFA the same, but add a category for players finishing their ELC and going into a 2nd contract. Lots of players are done their ELC by the time they are even really starting in the league and teams are having to pony up big bucks to keep these young guys who have not performed yet. I believe that if you kept them on a similar system as an ELC where is is a max base salary and then it is performance/bonus based. Just have the same system but double the max salaries and bonuses (and double the benchmarks they need to get those bonuses).

For these two concessions the owners should give up some things like allowing teams a one-time chance to buy out a contract for no cap hit at half the value of the contract. They should also change their revenue sharing by having all the TV deals including local ones and PPV shared equally between the teams. The last thing the owners should give is to more gradually walk back the % split to 50/50 to make the transition easier.

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As much as I am totally in the player's corner this time out, I do think there are a couple of concessions that they should be prepared to make.

Not every athlete gets guaranteed contracts like the NHL. With those contracts the owners take on a lot of risk. What the owners really should be going for are concessions that make it so they don't have to pay for players who don't perform.

I see two huge ways to aid this:

1. Limits on contract length. You don't know what a player will be like 5 years on, never mind 13 years. The 5 year limit with 7 years for your own player seems entirely reasonable.

2. Leave the ELC and RFA the same, but add a category for players finishing their ELC and going into a 2nd contract. Lots of players are done their ELC by the time they are even really starting in the league and teams are having to pony up big bucks to keep these young guys who have not performed yet. I believe that if you kept them on a similar system as an ELC where is is a max base salary and then it is performance/bonus based. Just have the same system but double the max salaries and bonuses (and double the benchmarks they need to get those bonuses).

For these two concessions the owners should give up some things like allowing teams a one-time chance to buy out a contract for no cap hit at half the value of the contract. They should also change their revenue sharing by having all the TV deals including local ones and PPV shared equally between the teams. The last thing the owners should give is to more gradually walk back the % split to 50/50 to make the transition easier.

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I guess they have to come to an agreement on whether they want to play hockey or if they want to make money, and whose money it should be. You're hitting the nail on the head. Some owners want to to able to dominate the market, especially the wealthy ones.

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I'm not sure if this article was already posted (it is from October, too many pages to scroll through), I just know that when I saw that the NHL actually hired Frank Luntz, their credibility spun to zero for me. Shame on the NHL for even hiring this guy (for those who don't know him, he is an ex-republican strategist and focus group analyst). He is basically an individual with a doctorate in spin-doctoring and cares for nothing but image.

Meet the Lockout Lawyers Destroying Sports

Dave Zirin on October 15, 2012 - 4:37 PM ET

Currently the sports world is suffering its fourth lockout in the past fourteen months. On four occasions since August 2011, pro sports owners have locked their publicly subsidized stadium doors, sent stadium workers home and stopped play as usual. This is not coincidence or happenstance. It’s a coordinated management offensive that has reverberations far beyond the playing field. Let’s look at the facts.

Last fall it was NFL and NBA players locked out of their jobs. This off-season, we first had the NFL referees, who make a pittance relative to the league’s revenue, watching scab refs stumble for three weeks. Now we have the ongoing lockout of National Hockey League players. NHL owners are coming off a year in which they made a record $3.3 billion in revenue. League owners have responded to this success by locking out the players, demanding massive concessions, canceling eighty-two games and squandering reservoirs of good will among fans.

I’m sure this must seem like a wild coincidence: four lockouts in fourteen months, affecting three of the four major professional sports leagues of this country. What are the odds? Actually, they’re very good. This is not merely a case of four sets of labor negotiations that have tragically broken down. This is a conscious, industry-wide strategy. A law firm called Proskauer Rose is now representing management in all four major men’s sports leagues, the first time in history one firm has been hired to play such a unified role. In practice, this has meant that in four sets of negotiations with four very different economic issues at play, we get the same results: lockouts and a stack of union complaints with the National Labor Relations Board. It’s been great for owners and awful for players, fans, stadium workers and tax payers.

Proskauer Rose partner Howard Ganz represents the NBA and Major League Baseball, and fellow-partner Bob Batterman has led negotiations for the NFL and the NHL. As Sports Business Daily reported, “Batterman and Ganz provide advice on strategy, as well as on issues that can emerge during talks, such as the legality of using replacement players.”

In other words, they are the people who scuttle collective bargaining and give word when to bring on the scabs. It was the now-infamous Batterman who was lead negotiator when NHL owners locked out the players in 2005 and canceled the entire season. Ian Pulver, counsel for the NHL Players Association in 2005, said of the lawyer, “Bob Batterman is a hard-nosed, smart management attorney who leaves no stone unturned. He will do his best to attempt to execute the orders of his clients including, but not limited to, breaking unions if necessary.” When Batterman was told of Pulver’s words he said, “I would be proud to have that on my epitaph.”

Proskaur Rose’s love affair with corporate power is not confined to representing professional sports owners. They boast on their website of having “one of the world’s pre-eminent private equity practices.” They are Bain, if Bain was smart enough to remain in the shadows. The firm’s other prize clients are a Murderers Row of Big Oil titans including BP America, Chevron, and ExxonMobil. Incidentally, this culture of representing polluters and union busters with pride and without societal concern seems reflected in the firm’s internal culture. Proskauer Rose is now being sued by their former Chief Financial Officer Elly Rosenthal, who accused the law firm of firing her following sixteen years as CFO after she took leave for breast cancer treatment. (Remember Elly Rosenthal the next time you see the NFL festooning its players in pink for Breast Cancer Awareness Month.)

Perhaps it’s time we start viewing sports leagues less like family fun and more along the lines of highly scrutinized institutions such as BP, Chevron, and ExxonMobil. They have more in common than just their lawyers. Like big oil bosses, pro sports owners love corporate welfare, right-wing politicians and are deeply hostile to union workplaces and collective bargaining. Just as what’s good for ExxonMobil’s stock value—price gouging at the pump, lax environmental enforcement, war in the Middle East—is bad for America; what’s good for pro sports owners is bad for fans, stadium workers and especially taxpayers.

Given the context, today’s news that the NHL has hired republican guru of sophistry Frank “let’s call global warming climate change” Luntz to help with their messaging, makes perfect sense. This is a Frank Luntz crowd and its agenda reaches far beyond the world of sports. The number of lockouts, once the third rail of collective bargaining, has doubled since 2010. But you need more than cash reserves to make this the new norm. For management to win a lockout they need to convince the public—and transform the culture—into thinking that lockouts (starving out your workers) is an acceptable practice. No NHL players are starving, of course, but this is about exploiting sports to enforce a new national labor paradigm.

Some might think that a good idea would be to pressure the NBA, NFL and NBA to actually fire the lockout lawyers. They might suggest that we start a campaign to insist that the leagues hire negotiators who put the interests of fans and taxpayers at the center of these negotiations. But even if we could successfully disengage Proskauer Rose from our pro sports leagues, NBA and NHL Commissioners David Stern and Gary Bettman have more in common than just the combined five lockouts they’ve overseen in the past thirteen years. They’re also lawyers who used to be partners at a firm called Proskauer Rose. We are confronting our worst nightmare as sports fans: a vampire squid with a law degree attached to every tentacle.

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I think that pretty much sums up the CBA negotiation in a nutshell. Playing hockey versus making profit, and how it should be divided. Some owners definitely want to dominate the market and will find ways to do so no matter what.

I've said it before - the problem with sports leagues is that owners collectively negotiate but always do so with their never ending competition with one another in mind. They will always be motivated to create rules to hinder other owners, but to find ways around the rules themselves. Basically, they will likely always make sure no CBA is truly effective because they will always break it. And then ask for more from players to make up for their misdeeds. And then just start the cycle all over again.

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